Sun, Aug 10, 2003 page10

• Nikkei has worst week in four months, TAIEX drops

  • BLOOMBERG
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  Asian stocks fell this week with Japan's Nikkei 225 Stock Average having its biggest decline in almost four months. Results from technology-related companies including Taiyo Yuden Co raised concern that their profit outlook doesn't justify the market's gain since April.

  The Nikkei dropped 3 percent to 9327.53, its biggest weekly fall since the five days ended April 11. Buying from overseas investors, which helped the Nikkei gain 31 percent since April 28, turned to selling on Tuesday.

  Indonesian stocks pared losses after falling as much as 4 percent on Tuesday following the nation's worst terror attack since October last year. Hong Kong's Hang Seng Index also had its worst week in four months, while Taiwan's TAIEX and South Korea's Kospi completed their biggest weekly drop in three months, weighed by companies including Korea Electric Power Corp and Taiwan Semiconductor Manufacturing Co, the world's largest maker of computer chips on a subcontracting basis.

  "We've entered a phase where some investors are starting to think that it's time to be locking in their recent gains," said Hiroyuki Kotoku, who helps oversee the equivalent of US$59 billion as global investments manager at Tokio Marine & Fire Insurance Co.

  "Market expectations for earnings growth in the technology industry have been too big," Kotoku said.

  Taiyo Yuden, which makes ceramic capacitors and inductors, slid 21 percent to ?1,048 its biggest weekly drop since the five days ended Dec. 22, 2000. The company on Wednesday widened its full-year loss estimate to ?3.8 billion from ?1.9 billion citing a decline in prices of condensers -- electronic components used in personal computers and mobile phones.

  DECLINES ACCELERATE

  Murata Manufacturing Co, the world's biggest maker of ceramic capacitors, which are used to regulate electricity in cell phone handsets, lost 5.8 percent, to ?5,340. It is set to report quarterly earnings on Monday.

  A shift in orders from overseas investors accelerated declines in the benchmarks, some investors said. People from outside Japan, who have been net buyers according to orders placed before the market open, turned net sellers on Tuesday for two days this week, the first time in 11 days they sold more shares than they bought.

  "Recent gains were supported by foreigners and now that we are entering summer holidays, we are seeing some selling," said Norihito Kanai, who helps manage the equivalent of US$2.5 billion at Meiji Dresdner Asset Management Co in Tokyo.

  The Topix index lost 2.7 percent to 917.47, its biggest weekly drop since April 4.

  In the US, the Standard & Poor's 500 Index fell 0.3 percent this week, while the Dow Jones Industrial Average rose 0.4 percent. The NASDAQ Composite Index dropped 4.2 percent, the biggest weekly decline since January 17.

  Since reaching this year's high on June 17, the S&P 500 has lost 3.4 percent amid concern that rising interest rates would slow growth in the economy.

  Indonesia's Jakarta Composite Index dropped 0.7 percent to 505.360 after a car bomb killed at least 10 people and injured 147 at the JW Marriott hotel in Jakarta.

  Telkom, as the country's largest telephone company is known, dropped 3.4 percent to 4,250 rupiah.

  In Hong Kong, Cathay Pacific Airways Ltd was one of the only two stocks that gained on the 33-member Hang Seng Index this week.

  Cathay, the island's largest passenger carrier, on Wednesday reported a first half loss while saying it will have a "much-improved performance" in the second half because SARS has been contained. Its stock jumped 4.1 percent to HK$11.50, its biggest weekly gain in two months. The Hang Seng dropped 3 percent.

  The TAIEX dropped 2.9 percent to 5232.55. Exporters such as Taiwan Semiconductor and Hon Hai Precision Industry Co were the two biggest drags on the index after the island's export growth in July missed some economists' estimates.

  Taiwan Semiconductor slid 3.3 percent to NT$58. Hon Hai, the island's biggest electronics maker by sales, gave up 11 percent to NT$122.

  The nation's exports last month rose 4.5 percent from a year ago to US$11.6 billion, the government said Thursday after the market closed. The gain lagged the median 5.8 percent forecast in a Bloomberg News survey of seven economists.

  The Kospi slumped 3.2 percent to 704.14. Korea Electric Power, which spends about a fifth of its fuel budget on oil, fell on concern higher crude prices may raise the company's costs. It slid 7 percent and helped make the Korea Electric and Gas Index the biggest drag on the Kospi.

  Hyundai Motor Co, South Korea's largest automaker, slipped 8.8 percent to 32,600 won on concern that its agreement with workers to increase wages may raise labor costs.

  AMP Ltd, Australia's biggest life insurer, slumped 8 percent, reaching a record low during the week after a report that its Henderson Global Investors unit may have broken rules for managing clients' money.
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